It’s showtime. In the long, complicated, otherwise drama-free process of choosing and implementing a new core system, there is one event, a moment when the curtain rises and the systems and their presenters appear before a live audience to perform. It would be a huge mistake to let the applause meter pick the winner, experts agree, but with shrewd direction, these performances can be useful preparation for a good decision. Without shrewd direction, they can be a misleading distraction.

To get useful insight, says Scott Hodgins, senior director of CUES Supplier member and strategic provider Cornerstone Advisors (crnrstone.com), Scottsdale, Ariz., it’s important for the CU to tightly script the demos themselves, with a schedule that allots specific times to issues the CU wants to address, and to confiscate the vendor’s script, which would typically be a sales presentation. The point of changing core systems today is usually to gain efficiencies, he notes, so it’s important for the CU to identify which processes need the most improvement and then insist that the demos
address those processes.

Cases in Point

For Tom Smith in Maple Grove, Minn., 2016 was the year to bite the bullet. $425 million TopLine Federal Credit Union (toplinecu.com), where he is president/CEO, had used the same core system for more than 20 years. The vendor had changed owners several times. The technology couldn’t support all the services the CU wanted to offer. So Smith sent out an RFP and started a selection process—not for core system providers, which would come later, but for a consultant to help guide the process. He picked Samaha & Associates (ssamaha.com), Chino Hills, Calif. It was the first core conversion in Smith’s 30-plus-year career, and he wanted it to be his last.

When TopLine FCU got to picking a core provider, its people saw five demos and then chose DNA from CUES Supplier member Fiserv (fiserv.com), Brookfield, Wis., to be its core system of the future. Those demos were meticulously scripted by the CU and Samaha.

“We wanted to impose a consistent format,” Smith explains, “so that we could compare system features side by side and see what each one could actually do. And we wanted to focus on the gaps. No system is perfect. Each presenter wants to show what his or her system can do. We wanted to also find out what it could not do and then assess how we could deal with that gap, whether it was manageable or a deal breaker.”

In Lancaster, S.C., CUES member Bruce Brumfield and his staff are going through a similar process. After 28 years with the same core system, $2.2 billion Founders Federal Credit Union (foundersfcu.com), where Brumfield is president/CEO, is preparing for a conversion. He and 150 of his staff attended demos in mid-April from the vendors of three core systems. Now scorecards are being tabulated and used to narrow the field to two. CU staff members will then visit credit unions using those two systems to learn how well they are performing for their peers. Compared to the work that leads up to the demos and the work that follows, the demos themselves are a small but indispensable part, Brumfield says.

For Brumfield, getting core selection right meant bringing deep experience to the process by hiring a consultant, in this case Cornerstone Advisors. “There are so many moving parts, so many ways we could get into the weeds and lose focus on what is most important to us. We wanted help, and we wanted it to be comprehensive, assessing where we are, the efficiencies and inefficiencies of all our current processes, help preparing the RFP, help staging the demos, help negotiating the contract and help implementing the system.”

Three vendors came to the CU for two-day demos. They were free to present as they wished, but all knew from the RFP what Founders FCU was looking for and tailored their presentations accordingly. The differences in the presentations were “slight,” Brumfield says. After each presentation, the vendors would be ushered out of the room, and the Cornerstone consultant would lead a debriefing tosum up and take stock of that they had just witnessed.

The Role of Consultants

Just how aggressively vendor presenters should be directed is a matter of some disagreement.

“If a CU has a consultant pulling the strings, the presentation may lose something,” says Jim Giacobbe, a veteran presenter and CEO of technology solutions provider and credit union service organization United Solutions Company (unitedsolutions.coop), Tallahassee, Fla. “If you have to chop it up their way, things get out of sync and can be more confusing to the prospective users. Each core vendor has its own character, and if you keep them on a short leash in the demo, you may not get a true sense of who they are.”

Sabeh Samaha, president/CEO of Samaha & Associates, takes the other side. Core demos are “dangerous events unless serious preparations are made to turn them into an informative, in-depth interview process that can brush past the salesmanship and get to a solid, objective look at the actual product,” he warns. The key, he says, is to turn the presentations into interviews instead of demos and to prevent vendors from delivering feel-good sales presentations. Otherwise, credit unions may end up picking the best demo, not the right product.

Many CUs evidently agree. About 70 percent of the Symitar (symitar.com) demos to prospective CU clients are consultant driven, according to Jimit Kapadia, product marketing manager of Symitar, a core product from Jack Henry & Associates (jackhenry.com), Monett, Mo., that’s used by 850 credit unions. His 10-member team demos Symitar about 800 times a year. That’s a lot of consultant encounters, and some are more helpful than others, he reports. “Some consultants are highly experienced and facilitate the flow of useful information. Some are still learning. And some have their own demo agendas and can push you into predetermined territory that may not serve the process. There’s quite a range.”

Consultants come with experience but also biases, Giacobbe points out. “When they know a product and have past clients who have chosen it and are happy with it, that product becomes their go-to system. Conversely, if they had a past client that was unhappy with a system, they are less likely to stick their necks out and recommend it.”

If a CU brings in an outside director to manage the core vendor selection process, what should his or her role be? According to Samaha, CUs should hire a consultant to prepare the staff for the demo/interview, not to represent the CU like a lawyer cross-examining the vendor witnesses. The consultant’s main work comes before the demo, he explains.

“The CU, coached by the consultant, needs to script questions in advance across all functional areas and practice interviewing the vendor,” he explains. The consultant should attend the demo as an observer, only intervening to prompt the CU questioners if the interview gets off track, he says.

Cornerstone Advisors’ consultants are more willing to speak up during demos, Hodgins says. Brumfield reports of his Cornerstone aides that during vendor selection, “They were active when we needed them to be; otherwise, they were silent.”